NEW YORK (AP) — The National Retail Federation, the nation’s largest retail group, expects the gain in holiday sales could shatter last year’s record season, even though a chain of The tangled global supply slows the flow of goods and drives up prices for a wide range of items.
The trade group said Wednesday it expects sales for the November-December period to rise between 8.5% and 10.5% to $843.4 billion and $859 billion. Holiday sales rose 8.2% in 2020 from a year earlier, when shoppers, stranded at the start of the pandemic, splurged on pajamas and home goods, mostly online.
The group expects online and non-store sales, which are included in the total, to increase between 11% and 15% to a total of between $218.3 billion and $226.2 billion, driven by online shopping.
Figures exclude billion car dealerships, gas stations and restaurants. Holiday sales have recorded average gains of 4.4% over the past five years, according to the group.
The forecast takes into account various indicators, including employment, wages, consumer confidence, disposable income, consumer credit, past retail sales and weather.
“There is tremendous momentum heading into the holiday shopping season,” said NRF President and CEO Matthew Shay. “Consumers are in a very strong position heading into the final months of the year as incomes rise and household balance sheets are stronger than ever.”
Shay also noted in a call with media on Wednesday that the lifting of U.S. restrictions on international visitors from more than 30 countries early next month should also come as a shock to retailers this holiday season.
NRF’s bullish forecast is similar to other forecasts, which call for holiday sales to increase by at least 7%, according to Deloitte, MastercardSpending Pulse and KPMG.
Still, NRF executives acknowledged on the call that there are plenty of headwinds facing consumers dealing with the ripple effects of a clogged supply chain that has driven higher prices. , less generous discounts and item shortages.
For example, online prices have increased by 3% as the holidays approach; in contrast, that number, on average, has declined by 5% in recent years, according to the Adobe Digital Economy Index, which tracks more than one trillion visits to retail sites in the United States. Adobe expects discounts to be between 5% and 25% across all categories this season, up from a historical average of 10% to 30%.
Just like last year, shoppers are shopping early for the holiday season for fear of not getting what they want. But Shay said retailers are doing a good job of ensuring inventory is on shelves, although there are gaps in some categories. Yet he’s seen shoppers learn to adapt by switching to other brands and items if they can’t find their top pick. This happened early in the pandemic, when customers were looking for other brands of consumer packaged goods when they couldn’t find their top choice.
“The consumer won’t be deterred,” Shay said. “They’re going shopping for the holidays, and they’re not going home empty-handed.”
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